Airlines beg for help as bookings nosedive

TWO major American airlines are in talks with the US government about potential help amid a dramatic drop-off in air travel, it emerged yesterday.

Delta Air Lines and American Airlines are reeling from a plunge in bookings and traffic, as the coronavirus pandemic prompts travel restrictions.

Delta chief executive Ed Bastian told employees on Friday that he is cutting 40 per cent of capacity in the coming months, the largest in the airline’s history, in addition to pursuing aid. The airline said it would soon halt all flights to continental Europe for the next 30 days.

Mr Bastian, who aconfirmed he will forego his salary this year, said: ‘We are in discussions with the White House and Congress regarding the support they can provide to help us. The speed of the demand fall-off is unlike anything we’ve seen.’ A spokesman for American Airlines said it, too, was in discussions.

Airlines and their trade association met with senior White House aides on Thursday to discuss the crisis. The conversations are in the early stages and no specific proposals have been exchanged so far.

Airlines have told government officials they may have to furlough tens of thousands of employees and warned that urgent action is needed. Mr Bastian said he was ‘optimistic’ about receiving government support but said the ‘form and value is unpredictable’, adding Delta could not put its ‘future at risk waiting on aid from our government’.

To preserve cash, Delta will park up to 300 aircraft, defer new aircraft deliveries and delay other investment initiatives, in addition to implementing a hiring freeze.

In another sign of pressure. Alaska Airlines said on Friday it borrowed $388million from existing credit facilities. It noted it has 133 aircraft that could be financed, if necessary, to generate another $2.5billion.

Meanwhile, US treasury secretary Steven Mnuchin urged Americans to shake off worries, saying the administration of President Donald Trump was ready to provide needed liquidity to US airlines.

He said: ‘It is of strategic importance to us. The airlines want to make sure they can continue to provide domestic travel [and] keep as many workers as they can.’